Everspin Reports Third Quarter 2018 Financial Results

CHANDLER, Ariz.--(BUSINESS WIRE)--Nov 8, 2018--Everspin Technologies, Inc. (Nasdaq: MRAM), the world’s leading developer and manufacturer of discrete and embedded MRAM, today announced financial results for the third quarter ended September 30, 2018.

Third Quarter and Recent Highlights

Total revenue of $11.5 million, an increase of 28% year-over-year
Executed joint agreement with SilTerra to establish additional manufacturing capacity for Toggle products
Extended length of joint development agreement with GLOBALFOUNDRIES providing both companies more effective controls on their respective development programs
Everspin 256Mb STT-MRAM will be available on another storage array platform from the company’s leading enterprise storage customer
Ended quarter with cash balance of $31.4 million

“Third quarter results demonstrated meaningful progress from both a revenue and an operational perspective. The third quarter results show an important return to top line growth for the company. I am pleased with the ongoing improvement our team has made in our Toggle operations and with the traction our 256Mb STT-MRAM product is gaining both within our lead customers and beyond. We remain on track with the planned sampling of our 1Gb STT product next month. And finally, we’ve successfully executed multiple strategic agreements and initiatives that we believe will support longer-term profitable growth,” said Kevin Conley, Everspin’s President and CEO.

Summary of Preliminary Restated Second Quarter Financial Results

Everspin also announced today that the company will be restating its second quarter 2018 financial results due to a discrepancy related to the timing of recognizing scrapped inventory in the amount of $770 thousand. As a result, the company will reflect an additional $770 thousand increase in cost of sales for the three- and six-month periods ended June 30, 2018, which will reduce gross profit and increase both loss from operations and net loss. The company anticipates filing its third quarter 10-Q and an amended second quarter form 10-Q/A on or before November 16, 2018. The second quarter 2018 financials are expected to be restated as follows:

Company to restate second quarter inventory to $8.9 million, versus $9.6 million previously reported
Cost of sales to be restated to be $6.2 million, versus $5.5 million as previously reported
Gross profit to be restated to be $4.5 million, versus $5.3 million as previously reported
Gross margin to be restated to be 42%, versus the 49% as previously reported
Loss from operations to be restated to be $7.3 million, versus $6.5 million as previously reported
Net loss and comprehensive loss to be restated to be $7.4 million, versus $6.6 million as previously reported

Revenue for the third quarter of 2018 was $11.5 million, a 28% increase over the $9.0 million reported in the third quarter of 2017 and a 7.0% increase over the $10.8 million in the previous quarter.

Gross margin for the third quarter of 2018 was 47% compared to gross margin in the third quarter of 2017 of 58% and in the second quarter of 2018 of 42%.

Operating expenses for the third quarter of 2018 were $10.9 million, an increase from the $10.6 million in the year-ago quarter and $11.8 million in the previous quarter.

Net loss for the third quarter of 2018 was $5.6 million, or ($0.33) per share, based on 16.9 million weighted-average shares outstanding, compared with a net loss of $5.4 million, or ($0.43) per share, in the third quarter of 2017 and a net loss of $7.4 million, or ($0.44) per share, in the second quarter of 2018.

Cash and cash equivalents as of September 30, 2018 were $31.4 million as compared to $32.7 million at the end of the second quarter of 2018.

Business Outlook

For the fourth quarter of 2018, Everspin expects revenue to range between $11.8 million and $12.2 million. Net loss per share is expected to range between ($0.22) and ($0.18) based on an average-weighted share count of 17.1 million shares outstanding.

Conference Call

Everspin will host a conference call for analysts and investors today at 5:00 p.m. Eastern Time. Interested participants can access the call by dialing 1-844-889-7788 and providing passcode 7429825. International callers may join the call by dialing +1-661-378-9932, using the same code. The call will also be available as a live and archived webcast in the Investor Relations section of the company’s website at investor.everspin.com.

A telephone replay of the conference call will be available approximately two hours after the call until Thursday, November 15, 2018, at midnight, Eastern Time. The replay can be accessed by dialing 1-855-859-2056 and using the passcode 7429825. International callers should dial +1-404-537-3406 and enter the same passcode at the prompt.

About Everspin Technologies

Headquartered in Chandler, Arizona, Everspin Technologies, Inc. is the worldwide leader in the design, volume production and distribution of Magnetoresistive RAM (MRAM) into markets and applications where data persistence, performance, and endurance are paramount. Serving applications across the data center, industrial, and transportation markets, Everspin has built the strongest and fastest-growing foundation of MRAM users in the world. For more information, visit www.everspin.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding future events that involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, Everspin’s expectations as to the timing of sampling of its 1Gb STT-MRAM product and the statements made under the caption “Business Outlook.” Actual results could differ materially from these forward-looking statements as a result of certain factors, including, without limitation, the risks set forth in Everspin’s Form 10-Q filed with the Securities and Exchange Commission on August 9, 2018, under the caption “Risk Factors.” Subsequent events may cause these expectations to change, and Everspin disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.